Construction activity up in C-U; pace higher in Champaign

Construction continues Wednesday on the Hyatt Place hotel in downtown Champaign.

Champaign's activity for year is about $77 million so far; Urbana's, only $8.5 million

CHAMPAIGN — Construction is rising in Champaign — both in height and dollar amounts — while Urbana has yet to see those figures return to pre-recession peaks, but city officials are confident that the numbers are on their way up.

Champaign officials have released building permits for more than $100 million worth of construction projects in the previous 12 months, and about $77 million of that figure has been documented so far in this calendar year alone. The figures are far from a 2007 building high of $304 million, but it's still a promising spike for city officials who watched property tax revenues suffer through the recession.

Urbana has issued permits for more than $18 million worth of projects between July 2012 through June 19. In this calendar year, Urbana has seen only $8.5 million worth of building projects launch.

A closer look at those numbers shows Champaign is leaning heavily on multifamily developments and new hotels — particularly along Green Street — while roughly half of Urbana's construction value for this calendar year is concentrated in an affordable housing redevelopment project paid for by the Housing Authority of Champaign County.

The numbers do not tell the whole story, said Urbana Economic Development Manager Tom Carrino.

"I know we've got a lot of projects in the works where permits haven't necessarily been applied for yet," Carrino said.

Economic activity in Urbana certainly has picked up, he said. There have been many redevelopment or renovation projects in the downtown area. Matt Cho of Cake Design Development LLC recently bought two underused buildings across the street from Busey Bank and spent $750,000 preparing them for occupancy. The city subsidized $70,000 of that project.

Flying Machine Coffee will now join Pizza M in those buildings. A nightclub is set to open a few doors down, and the Stephens Building around the corner is being prepared for occupancy.

"We worked pretty hard to fill space in what we called underutilized spaces in downtown specifically," Carrino said.

Encouraging reoccupancy of existing buildings has been a big push for city officials.

"We've worked hard, and it seems like we've had a lot more activity related to that," Carrino said.

In a larger project, Frasca Associates says it plans to expand its flight-simulator business and Frasca Field Airport near the intersection of Cunningham Avenue and Airport Road.

The Frasca project would include renovations of existing facilities, expansion of one building and construction of a new 12,000- to 24,000-square-foot facility. The project will be done in phases and would not yet be reflected in building permit numbers.

Like Cho's, the Frasca project is moving forward with city incentives. The city would rebate 60 percent of the property-tax revenue generated by the expansion during the next 10 years. That rebate would be capped between $275,000 and $425,000, depending on the final cost of construction.

A student housing project is being prepared, too, but its builders have not yet applied for a permit.

Expected to cost $30 million, the so-called "Campus Circle" project would be a five-story, 197-unit complex with beds for 510 students in the 1000 block of West University Avenue.

"It was originally going to be constructed before the economy slowed a little bit," Carrino said. "So it sat for a little while and it's being picked up again."

Student housing is proving to be a boon for both cities — Champaign has a "ripe" market for student housing, said Planning and Development Director Bruce Knight.

A few multimillion-dollar, multifamily projects have launched on Green Street or will launch within the next year or two. Those include a five-story apartment building near Second Street, a 16-story apartment building at Fourth Street and 14- and 12-story projects at Sixth Street.

Developers for the 14-story high-rise where Gameday Spirit used to be completed a building permit application this week. That project — estimated at about $10 million — should add some more padding to Champaign's construction value when the permit goes out.

The 12-story JSM Development project at Sixth and Green streets will cover city parking lot J and plans include a 108-room Marriot TownePlace Suites hotel.

Jill Guth, development director for JSM, said that the company has always thought Lot J would be a great site for student housing. And the developer continues to get strong interest from national retailers for space along Green and Sixth streets, she said.

"We've also thought for a very long time that a hotel was kind of the missing link in Campustown," Guth said.

City officials believe those Green Street projects will change the landscape of the area, and they think it is a result of the preparations they have made to attract that market during the past.

"I think it's a variety of things," Knight said. "Certainly investment in multifamily housing, specifically student multifamily housing, is pretty high across the country. We're ripe for that as a result."

Knight thinks a strong spring of new construction along Green Street is also a result of the city's investment in that corridor over the years. Officials have completed "streetscape" improvements, and even further back, remodeled the Boneyard Creek to reduce flooding.

"Developers want to invest in cities where they fix their roads ... we dried up Campustown," said Champaign Mayor Don Gerard. "Just that act alone, from being an age where I remember the row boats out on Green Street."

Knight points out that the Green Street high-rises are moving forward without city incentives.

"This is all market driven," Knight said. "I think it's where a lot of students want to live."

A Hyatt Place hotel in downtown Champaign, however, did require a nudge from the city. It will replace the old Metropolitan Building, which burned down in 2008.

A building permit listing the project cost at $22.5 million went out in January. In return for filling in the hole downtown, city officials will rebate up to $3 million in taxes to the hotel over 10 years.

The property taxes from new construction will not be reflected in tax rolls for at least a couple years, but the numbers are more optimistic as city officials look to their future.

Single-family housing has shown an uptick, too. Knight added that he thinks the in-fill development is a trend that will continue, although there's no telling if it will be quite as dense as what is going up on Green Street during the next couple years.

"I think we are coming back out of the recession," Knight said. "Especially the housing market is starting to kick back in. I think it's changed, and what we're trying to understand is how it's changed and for how long."

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The "smart folks" running Urbana are still congratulating themselves on the super-dooper re-deveopment of the Philo Road Business Corridor! Any real development is beyond their capabilities. Remember this is the same mayor that was upset & made an issue over three wild turkeys running the streets of Urbana a few years back. Talk about getting priorities in order!!! Sorry I invested in Urbana...can I get a refund?